California and other western states suffered historically severe wildfires following years of significant drought. Estimates of damage for California alone were $9.4 billion as of early December 2017 and that figure is destined to rise as all damages are finally assessed and claims are completed. Some estimate that the final number will roughly be $180 billion, but only time will tell. Aside from the fire damage itself and loss of life, there are many secondary issues that arise.

 Fire is virtually always a covered peril, and is used as the standard example of a covered peril. So it comes with some surprise that with the significant wildfires this season that the California Department of Insurance is concerned that the extent of damage could discourage carriers from writing new policies in these areas. Residential property losses in Sonoma County alone exceed $2.6 billion. Napa County sustained commercial losses of over $3.2 million, and residential losses of over $266 million. Residential losses from all fires are over $3.1 billion, with commercial losses at $137 million. Already insurers have refused to renew over 10,000 policies in the counties most vulnerable to wildfires. This is an increase of fifteen percent from last year. There are 1.3 million homes determined to be at high or very high-risk fire.

 While random house fires caused by Christmas trees, cooking accidents, open flames and other situations cause a large number of house fires, they are in varied areas at varied times. With wildfires, a large portion of a carrier's insured properties are exposed to catastrophic losses all at once. This is driving the concerns of carriers, as well as the fact that more development has occurred in areas closer to wildfire zones. Unless the homes are underinsured though, the policyholders are covered for their losses. The aftermath, however, is a different story.